Marijana No Comments

What does the coronavirus crisis mean for UK house prices?

We’ve been in lockdown all week, and I’ve been writing about coronavirus nonstop. (In fact, it’s been such a busy week that I literally just stopped for a minute there to check that we’ve only been in lockdown for one week, and not two). And yet I realised that there’s something missing.

I haven’t said a word about the most important asset class in the UK. It’s time to rectify that oversight. Today we ask: “What does coronavirus mean for house prices?”

The UK housing market is closed for business

Let’s start with the obvious. No one is allowed to leave their houses except for essential purposes. Essential purposes – wild as that may sound to some – do not include house hunting. So that means the residential property market is pretty much closed.

Quick interjection here for those of you who are currently in the midst of moving and wondering what to do now – the government yesterday said that “there is no need to pull out of transactions”. And if you’re moving into a vacant property, you can basically go ahead as before.

But if you’re moving to a currently occupied property, “we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus… will no longer be in place.” In other words, chains across the country are going to be extended massively and potentially to breaking point. (We’ll have more on the mechanics of all this in next Friday’s issue of MoneyWeek – sign up now and you’ll get your first six issues free).

Property website Zoopla apparently reckons that the number of homes sold in the UK will fall by 60% in the next three months. I hate to say it, but that actually sounds optimistic to me – and buying agent Henry Pryor, no stranger to MoneyWeek readers, agrees.

Deals are also going to fall through left, right and centre. Would you move now, unless you absolutely had to? No chance.

There’s another reason the housing market is closed: banks are rapidly shutting down the range of mortgages they offer for new purchases. In effect, unless you can stump up a 40% deposit, you’re going to find it difficult to get a mortgage to buy a house, even if you really want to go ahead right now.

Why is this happening? Firstly, the banks say they are struggling with staffing, which is fair enough given that call centres the world over are shutting. More pertinent though, are two key factors.

One, you can’t tell what a house is worth right now because liquidity in the housing market (always tricky even at the best of times) is gone. It’s very hard to value a home when there are no comparable sales to gauge it against.

Two, you don’t know how secure your customer’s job is. The government has put in place some very strong temporary measures to protect people – but what happens in a year’s time? What state will the economy be in?

Do you want to be writing loans to individuals whose future income is uncertain, secured against assets of uncertain value? Nope, and banks don’t either.

Of course, in pulling the supply of credit to the housing market, they risk creating the very scenario they fear. But as my former colleague Phil Oakley noted to me the other day, that’s what banks always do in these situations.

What does all of this mean for house prices?

OK, so we have a near-total housing market freeze. What does that mean for prices and other financial side-effects?

From an investment point of view, the market appears to have just woken up today to the fact that none of this is good for housebuilders. Housebuilders make houses. If no one is buying their products, they need to hunker down and conserve cash. Maybe they’ll get a chance to build land banks on the cheap, but maybe not.

So you’d probably want to avoid that sector for now (we’ll see how cheap they get).

As far as the housing market goes: the obvious point is that you won’t be able to trust any price or transaction data for several months. There will be some forced sales (hopefully not too many, given that people should now be able to ask for three-month mortgage holidays where needed), and there will be some cash buyers.

However, for anyone who isn’t a professional property flipper or large-scale landlord, none of that is terribly relevant. In stockmarket terms, this isn’t a crash – it’s more like the market has actually been shut.

So what happens when it re-opens? That’s more important. House prices are pretty much driven by the price and availability of credit. If interest rates are low, and you can also get a mortgage easily, then house prices will be high.

If rates stay low but it’s hard to get a mortgage, then transactions probably dry up, but those that do go through will still be at relatively high levels (in effect, you’re only allowing people with access to credit to move).

If rates go up, that’s when you start to see prices falling. Alternatively (or simultaneously), if lots of people lose their jobs and thus become forced sellers, that’s also when you start to see prices falling.

So what’s likely to happen? I guess it depends. The estate agent optimists argue that there will be pent-up demand, but I don’t think we’ll get a V-shaped recovery. A lot of people who had wanted to move will either find that they can’t be bothered any more, or that they are too worried about job security to do so. So I can see it taking a while for transaction levels to recover.

But what about interest rates? I don’t see them going up. I think interest rates will be capped for quite some time and that inflation will be given as free a rein as possible to take off and start eating away at all the debt we’ll have incurred during this. That in turn could and should lead to higher demand for physical assets such as property.

However, again this depends on the economy bouncing back strongly and there being no lasting rise in unemployment. I think that’s still possible – and obviously in the longer run the economy will recover – but it’s the timescale that I’m not sure about.

Overall though, given the importance of house prices to UK households’ balance sheets, this isn’t good news for consumer confidence. But then, none of us is able to go out and spend widely right now anyway, so maybe that’s not as important as it normally is.

Long story short – you can’t move right now so worrying about house prices is probably a waste of time. In six months’ time, we’ll see where we are. In the longer run, I’d expect a combination of low rates and rising inflation to push prices up. But it might be a wee while before we get there.

By John Stepek

Source: Money Week

Marijana No Comments

Coronavirus to bring UK house prices growth to ‘juddering halt’

The coronavirus outbreak is set to bring UK house prices to a “juddering halt” in the coming months, a top economist warned today.

UK house prices fell 1.1 per cent between December and January. But they were 1.3 per cent up on the previous year, data released today showed.

The Office for National Statistics said UK house prices increased 1.3 per cent over the year to January. That was down from 1.7 per cent growth in December.

Average UK house prices increased 1.1 per cent over the year in England to £247,000. In Wales they rose two per cent to £162,000. And they were 1.6 per cent up in Scotland to £152,000, and 2.5 per cent higher in Northern Ireland to £140,000.

London house prices grew 1.4 per cent over the year.

Howard Archer, chief economic adviser to the EY Item Club, said the data showed the housing market was in a relatively good place following December’s election.

Coronavirus to harm UK house prices’ Brexit recovery

But he warned said coronavirus was likely to stop growth in its tracks.

“The late-2019, early-2020 upturn in the housing market looks certain to be brought to a juddering halt by the impact of coronavirus on the economy,” he said.

Miles Robinson, head of mortgages at online mortgage broker Trussle, added the coronavirus outbreak will deal a blow to UK house prices.

“We can’t ignore the elephant in the room,” he said. “Pressure is mounting on the economy as the coronavirus outbreak escalates. As it stands, we’re yet to see its full impact on the housing market.

“With more stringent government guidelines now in place… sellers may see a drop in property viewings for at least three weeks.

“Many existing homeowners will have been financially affected by the outbreak. The chancellor’s announcement to freeze mortgage repayments will help to reassure those who are worried about their ability to make their monthly payments.”

Archer said data from other sources such as the Bank of England and a survey from Halifax showed the UK housing market was in good shape before the crisis hit.

The Halifax survey showed a 2.9 per cent increase in UK house prices in the three months to February.

However, a recent survey from the Royal Institute of Chartered Surveyors (RICS) showed early evidence of the possible impact of coronavirus.

The RICS survey said: “Although near term sales expectations remain positive, optimism has moderated somewhat, with anecdotal evidence suggesting concerns over the economic impact of the coronavirus are weighing on the outlook to some extent.”

Rightmove has in the last week reported a “significant” slowing in property sales.

By James Booth

Source: City AM

Marijana No Comments

UK house prices surge post-election, but Covid-19 dampens outlook

House prices hit a fresh high in February, data published on Monday showed, as consumer confidence improved following last year’s decisive general election.

According to Rightmove, the UK average new seller asking price hit a record high of £312,625, a 1.0% month-on-month increase that pushed annual price growth up to 3.5%.

The number of sales agreed rose by 17.8%, the highest for the time of year since 2016. Overall, properties sold an average of 6% faster nationally and 15 days more quickly in London.

The UK housing market – and the capital in particular – has struggled in recent years. Ongoing political turmoil over Brexit and successive general elections dampened consumer confidence and saw prices dip as sales fell away.

The Conservative’s decisive general election victory and the UK’s subsequent departure from the European Union have helped ease that uncertainty, however.

In London, the price of property coming to market jumped 5.1% year-on-year, to an average of £638,826, the highest annual growth rate since May 2016. The number of sales agreed ratcheted ahead 34.4%, the highest level for four years.

However, the survey conceded that going forward, the outlook was now less certain.

“The market has been waiting for several years for a window of certainty, and 2020 seemed set to be the year when many would look to make a move and satisfy their pent-up housing needs,” said Miles Shipside, Rightmove director and housing market analyst.

“However, the current fast pace of the housing market could now be temporarily affected by the spread of the Covid-19 coronavirus. We expect that housing market statistics, like other economic indicators, could be prone to volatility over the spring and summer.”

Marc von Grundherr, director at London estate agent Benham and Reeves, said: “London is now back with a bang. An annual increase in asking prices of 5.1% is the highest level that we have seen in years, and is as a consequence of buyer demand coming back strongly in all price ranges.

“Covid-19 is of course a significant issue, albeit that enquiry levels and viewings do seem to be holding up for now, and we should remain optimistic for swift resolution to the pandemic followed by a robust response from markets including property.”

Rightmove measured 111,464 asking prices, which it said was around 95% of the UK market, for its latest monthly survey. The properties were put up for sale between 9 February and 7 March.

By Abigail Townsend

Source: ShareCast

Marijana No Comments

UK house prices shrug off Brexit, sail into coronavirus

UK house prices seem to have shrugged off the Brexit effect. The number of estate agents’ signs being posted outside UK homes seems to have proliferated since the election in December, and now there is an air of renewed confidence in the UK housing market that was not there before.

This is reflected in the latest data from Halifax, which shows UK house prices are up 2.8% for the month of February. This represents a month on month increase of 0.3%. The average UK home is now valued at GBP 240,677.

Growth in UK house prices has looked steady this year

Growth in the value of UK housing has been steady ever since the start of the year. Halifax said it was seeing a sustained level of buyer and seller activity that was not there in 2019. The UK has now officially left the EU, and there has been something of a sigh of relief in the UK property market, but there are also further storm clouds on the horizon.

Halifax says it is hard to gauge the impact of the coronavirus but as this could significantly damage UK economic activity this spring, there could also be a knock on effect on UK house prices.

The house view here at The Armchair Trader is that the spread of coronavirus will slow down as the weather warms up, as it follows the dynamics of traditional flu. The damage to the UK economy is going to be harder to quantify but is likely to feed through into UK house prices.

Mortgage approvals data supports house prices gain

Mortgage approvals data is supporting the price growth numbers published by Halifax. Lender Octane Capital has conducted its own risk review of the UK property market following the general election result and is lowering the rate on its larger lender, developer exit and refurbishment loans by up to 2% per annum.

“Like other lenders we regularly review the macroeconomic outlook and felt especially compelled to do so in the New Year following the decisive general election result,” explained Mark Posniak, Managing Director with Octane Capital. “Our in-house view is that a new environment of greater political certainty will see a lot of pent up demand for property come through, with subsequent upward pressure on prices.”

Posniak said he believed the Bank of England will counter any continued economic weakness with more monetary easing which could provide an additional boost to UK property prices going into Q2.

Buyer sentiment is going to be crucial here. We have seen a couple of months of activity since the end of the Christmas holiday period which has supported the thesis that the UK house buyer is coming back into the market. The coronavirus is not going to help UK house prices in the short term and we are not expecting March numbers to look as good as February’s.

That said, for buyers that are still contemplating an entry into UK housing as an investment before a possible post-Brexit boom the numbers do illustrate that the appetite is there. The coronavirus will, if anything, provide investors with a few more months to pick up some bargains before the market picks up in the summer.

Source: The Armchair Trader

Marijana No Comments

UK house prices: Brexit clouds lift, but coronavirus threat looms

UK house prices rose 2.8 per cent in February compared to the same month last year, Halifax data showed today.

Homes’ values increased 0.3 per cent month on month and 2.9 per cent on a quarterly basis, Halifax’s House Price Index found.

That left the average UK house price at £240,677 in February.

But while the threat of Brexit uncertainty has faded for now, the new risk of a spiking number of coronavirus cases loomed over UK house prices.

Russell Galley, managing director of Halifax, said: “The UK housing market has remained steady heading into early spring.

“Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.

“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.

“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”

Brexit clouds lift from UK housing market

Read more: Brexit trade talks: Michel Barnier cites ‘serious differences’ between EU and UK stances

Property experts concurred that Brexit uncertainty has mostly ended after Nationwide’s data also showed a healthy bump in UK house prices in February.

Director of estate agent Benham and Reeves, Marc von Grundherr, welcomed it as a new sign of the UK property market’s health.

“The UK property market has awoken from its politically induced slumber and is firing on most, if not all cylinders so far this year,” he said.

“With the burden of Brexit lifted, the jobs market strong and borrowing rates at near record lows, there is renewed vigour in UK bricks and mortar,” Jonathan Samuels, CEO of property lender, Octane Capital, said.

“The strong January mortgage approvals data published earlier this week shows many buyers have turned a corner psychologically.”

Lucy Pendleton, founder director of independent estate agents James Pendleton, added: “It’s no surprise to see continued healthy price growth like this. Demand and supply have both been rebounding recently but, so far, the number of new buyers is definitely outpacing the return of sellers.”

Coronavirus threatens UK house prices

But observers also warned that the threat of a worldwide coronavirus outbreak could conspire to land a fresh blow on the UK housing market.

“We’ve seen the dark clouds of Brexit-inspired uncertainty hang over the market for some time causing a drop in price growth and transactions,” Stone Real Estate founder Michael Stone.

“However, just as they finally start to make way for blue skies and buoyant price growth, there could be another storm front rolling in in the form of the threat from the coronavirus.”

Stone warned that new builds abroad “have all but ceased” and travel restrictions have stopped developers from attracting foreign investors.

“If this persists for a notable length of time the very real possibility is a reduction in foreign investment and a negative impact on house prices,” he said.

Benham and Reeves boss von Grundherr said his last survey found 17 per cent of people have put house buying and selling plans on hold due to the coronavirus.

“If this hesitation were to spread as rapidly as the cause itself, we could see current growing momentum peter out as market activity stalls once again.”

Pendleton also warned of the impact of the coronavirus outbreak. She said the estate agent saw its first sale fall through after an events industry worker pulled out of a purchase with his job at risk.

“The hope is this will remain an isolated case but the impact of the virus will become clearer in March,” she said.

“For now, with valuations still rising and competition for certain properties still fierce, buyers have begun to put in offers on multiple properties in a bid to secure an option before stalling over exchange of contracts in case something better comes along. This could create an unappealing log jam and put more completions at risk if Covid-19 starts to become a major factor.”

Buyers wait for Budget 2020 and rate cut

But von Grundherr added “the vast majority” of buyers are unfazed and a spending Budget and an interest rate cut could help bolster UK house prices.

“The worst thing that could happen to the property market is for it to fall into the same old cycle of boom and bust,” Samuels warned.

“The two key threats to the property market at present are the impact of the coronavirus if things escalate and a negative, even rancorous, outcome from our trade negotiations with the EU.

“What we want to see during 2020 is a rise in transactions, increased liquidity and steady and sustainable price growth.”

By Joe Curtis

Source: City AM

Marijana No Comments

UK house prices grow at fastest rate for 18 months in February

UK house prices grew at their fastest rate since July 2018 in February, according to Nationwide figures released today.

February’s annual rise of 2.3 per cent, up from 1.9 per cent in January, was UK house prices’ strongest rate of growth in 18 months.

That left the average UK house price at £216,092, up from January’s £215,897 despite the economy flatlining in the last quarter of 2019.

Prices rise but uncertainty clouds 2020

Nationwide’s chief economist, Robert Gardener, said it was a sign of gathering momentum in the UK housing market.

“While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low,” he said.

“The decisive election outcome may have provided a boost to buyer sentiment.”

But he warned that the economy faces “significant uncertainties” that could hurt UK house prices. The coronavirus outbreak and Brexit trade talks are chief among those challenges.

“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters,” he said.

“Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.

“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”

February’s monthly rise of 0.3 per cent marks the fifth monthly hike in UK house prices – the first time since May 2016 this has happened.

And house prices rose one per cent in the three months to the end of February compared to the previous three to deliver the highest such rate in two years.

Brexit clarity gives UK house prices a bump

More clarity on Brexit – despite fresh uncertainties over the likelihood of a trade deal – boosted UK house prices, economists said.

“The housing market has seemingly got a leg-up from increased optimism and reduced uncertainties following December’s election,” Howard Archer, chief economic adviser to the EY Item Club, said.

That led EY to increase its 2020 outlook for UK house price growth from 2.8 per cent to three per cent. EY’s forecast had sat at two per cent at the turn of the year.

Boris Johnson’s December General Election victory also played a major part.

“The housing market is continuing to strengthen in the wake of the General Election,” Samuel Tombs, UK economist at Pantheon Macroeconomics, said.

“Other surveys suggest that this momentum will be largely maintained. Asking prices rose at a 2.9 per cent year-over-year rate in February, according to Rightmove. In addition, the RICS survey showed the largest net balance of surveyors for four years in January expected house prices to rise over the next three months”

But Brexit trade talks still a fear factor

“However, the economy still looks set for a pretty challenging 2020,” Archer added. “There will still be appreciable uncertainties, including on the UK-EU relationship front – so that the upside for house prices in 2020 is likely to be limited.”

Coronavirus could hurt UK house prices

Marc von Grundherr, director of estate agent Benham and Reeves, warned the coronavirus outbreak could hurt UK house prices, however.

“As the world continues to tackle the Covid-19 pandemic, there are murmurings it could impact house prices as well as health across the domestic market,” he said.

“At this stage and while UK cases remain few and far between it remains unlikely. Foreign investors at the very highest level might be pausing to take stock. But it’s probably not one that will be felt by the average UK home buyer or seller.”

Mansion tax to hit London?

Von Grundherr said buyers and sellers will be more mindful of next month’s Budget, where a possible so-called mansion tax could hurt London house prices.

“A potential mansion tax via next month’s budget is far more likely to dent the sentiment of London’s high end foreign investors in particular, although they are arguably best placed to stomach such a hit. “

By Joe Curtis

Source: City AM

Marijana No Comments

UK house prices: Buyer boom sets scene for record-breaking spring

UK house prices are expected to break records over the coming months as buyer activity outstrips the number of new sellers, according to new research.

The average price of property coming to market jumped 0.8 per cent – or £2,589 – this month, just £40 short of a new all-time high.

The house price boom is being driven by the release of pent-up pressure following the General Election, and experts said the growth would gain further momentum on the approach to spring.

Online estate agent Rightmove said monthly traffic was up 7.2 per cent on the previous year, and the number of sales agreed nationally was up 12.3 per cent.

In London, the number of agreed sales jumped 26.4 per cent compared to last year, according to data from Rightmove.

Rightmove director and housing market analyst Miles Shipside said: “There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month.

“The average price of newly-marketed property is just £40 below its all-time high from June 2018, with the typically busy spring market still to come.

“This means that spring buyers are likely to be faced with the highest average asking prices ever seen in Britain.

“Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.”

By Jessica Clark

Source: City AM

Marijana No Comments

UK house prices leap 4.1 per cent in bumper January – Halifax

UK house prices jumped 4.1 per cent in January on an annual basis to come close to a two-year high, fresh figures from Halifax showed today.

Homes rose 0.4 per cent in value compared to December, and climbed 2.3 per cent on a quarterly basis, Halifax’s house price index revealed.

Russell Galley, managing director of Halifax, said:

House prices kicked off the year with a modest monthly increase, rising by 0.4% in January following the stronger gains of 1.8% and 1.2% seen in December and November respectively. As a result, annual growth remained relatively stable at 4.1%, up just a fraction from the end of 2019.

A number of important market indicators continue to show signs of improvement. We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy. However, it’s too early to say if a corner has been turned. The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy.

Looking ahead, we still expect a moderate rate of house price growth over the course of the year. Demand is likely to continue to exceed the supply of properties for sale across the UK, with the subdued pace of new building also adding to upwards price pressure. The environment for mortgage affordability should stay largely favourable. However with the growth in rental costs accelerating, many first-time buyers will continue to face a significant challenge in raising necessary deposits.

UK house prices growth ‘impressive’

“It looks impressive that house prices were still able to rise by 0.4 per cent in January given the size of the jumps seen in both December and November,” Howard Archer, chief economic adviser to the EY Item Club, said.

He pointed to the big surge in quarterly hikes in UK house prices. Homes rose 2.3 per cent in value for the November to January period compared to the previous quarter’s one per cent rise. And that was better than a 0.2 per cent quarterly jump recorded in November.

But Archer warned 2020 will remain a difficult year for the UK.

“The economy still looks set for a pretty challenging 2020 and there will still be appreciable uncertainties,” he said in a reference to Brexit trade deal negotiations.

“The upside for house prices in 2020 is likely to be limited.”

EY still raised its predictions for UK house price growth in 2020, however, from twoper cent to 2.8 per cent.

“There is clearly a possibility that they could rise more than this,” Archer added.

Election’s feel-good factor

Marc von Grundherr, director of lettings at estate agent Benham and Reeves, hailed the rise as evidence of a post-election “Boris bounce”.

“It would seem that the Boris bounce in market activity that followed December’s election has blown market expectations out of the water,” he said.

“Given the months of market decline and the seasonalities involved, this turn around is really quite remarkable and demonstrates the absolute resilience of our bricks and mortar market.”

He added that a “Brexit-inspired bump” could further boost the housing market for February and a further jump in spring could come with the 11 March Budget.

By Joe Curtis

Source: City AM

Marijana No Comments

UK house prices are likely to continue rising in 2020, but problems remain

House prices are showing signs of recovery across the UK, with the highest house price growth in 2019 reported in December, at 1.7 per cent, pushing the average house price growth for the year as a whole to four per cent.

This puts the expected house price growth for 2020 up from the previously expected two to three per cent, and this expectation sends a clear signal to prospective home buyers to act quickly if they’re planning to take out a mortgage this year.

The latest Halifax House Price Index shows that mortgage approvals were slightly up towards the close of the year, so it’s certainly not a bad time for mortgage applicants solely in terms of getting the green light on their residential loan.

However, the current housing statistics also point to an ongoing lack of supply of suitable housing. Buyer demand showed a significant upward trend in December 2019 – up 17 per cent according to RICS, and in marked contrast to the negative trend in buyer enquiries observed in October and November 2019.

January is traditionally a much busier time for the housing market than December, and there are already indications that demand has risen yet again this month. Without a doubt, the outcome of the General Election has had a positive effect on what’s known as ‘buyer sentiment’. More people are at least willing to start making enquiries, although it’s important to remember that enquiries don’t all automatically translate into transactions, which have increased by a more modest nine per cent.

But what about the supply of houses to meet this returning buyer confidence? This is where the market is not catching up, with the overall positive narrative of a house market returning to good health. New instructions rose by nine per cent at the national level, and in London and the South East, they remained more or less flat. This means that, on average, housing supply is just about increasing at a rate that is able to satisfy the return in demand, and, in some regions, it isn’t increasing proportionally at all. Managing director of Halifax Russell Galley comments:

‘Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.

‘Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.’

What does this mean for you if you are a prospective buyer? Now is not the time to hesitate: a once-again buoyant housing market that demonstrates a lack of supply will mean that competition for the best homes in the most desirable areas (especially outside London) will be tougher. So, if you’ve seen a nice property and you are in a position to buy, don’t wait.


Source: Real Homes

Marijana No Comments

UK house prices rise 1.9 per cent as buyers hail 2020 ‘Boris bounce’

UK house prices grew at their fastest rate in over a year at the start of 2020, according to Nationwide, as experts hailed Boris Johnson’s election victory.

The housing market posted a 1.9 per cent annual rise in January, beating December’s 1.4 per cent climb. That followed 12 months of consecutive growth below the one per cent mark after November 2018’s 1.4 per cent hike.

Growth in UK house prices rose 0.5 per cent between December 2019 and January 2020, Nationwide’s figures also showed today.

That left the average UK home valued at £215,897.

‘Boris bounce’ boosts UK house prices

“Sparks were flying after the election but this month the housing market has ignited, with the so-called Boris bounce providing the match,” Lucy Pendleton, founder of James Pendleton estate agents, said.

“A year ago the annual growth rate was just 0.1 per cent. This step change in house price growth is being driven by a resurgence of demand and, with it coming before we’ve even left the EU, is clearly significant.

“Boris Johnson’s emphatic election victory has retrieved the spanner from the works and the housing market is now positively humming.”

Nationwide’s figures follow UK Finance data revealing that home buyer mortgage approvals also soared 24 per cent in the run up to Christmas.

But Nationwide chief economist, Robert Gardner, took a more measured view of January’s growth.

He said: “The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.

“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

He added that economic growth slowed dramatically at the end of 2019, but business surveys are pointing up at the start of 2020.

‘Step change’ in sentiment

David Westgate, chief executive at Andrews Property Group, hailed January’s growth in UK house prices as a “step change” in buyer demand.

“While prices didn’t skyrocket in January, compared to just three months ago the mood in the property market has changed quite materially,” he added.

“People who were hesitant amid the political uncertainty of recent years are now making their move. January can always be a bit slow but the signs for the Spring as a whole are very promising.

“There is a huge amount of pent-up demand in the market and we are already seeing it start to come through.

“Crucially, even aspirational movers are coming back to the market, which highlights how sentiment has improved.”

By Joe Curtis

Source: City AM